VietinBank (CTG) will increase its charter capital this year from 20.2 trillion VND (963 million USD) to 30.8 trillion VND (1.4 billion USD), an increase of over 10 trillion VND, chairman Pham Huy Hung told the bank's annual shareholders meeting in Hanoi on Feb. 28.

Many shareholders wondered aloud whether such a substantial increase can be achieved, with the stock market in difficult circustances.

But Hung said the plan will call for charter capital to rise to 26.2 trillion VND immediately from retained earnings on 2011 profits and the sale of shares representing a 9.6-percent interest.

Hung noted that Vietinbank expects to pay a 16-percent dividend on last year's profits, but the amount will be paid in shares, allowing an increase in treasury shares to be allocated towards charter capital.

Currently, the State holds 80 percent of shares in Vietinbank, while domestic and foreign shareholders hold 10 percent and the International Finance Corporation (IFC) the remainder.

Later this year, the bank will sell a 15-percent interest to a foreign strategic investor for an estimated 4.6 trillion VND (219 million USD), bringing charter capital to over 30.8 trillion VND (1.46 billion USD). By that time, the State will hold only 68 percent and VietinBank will have two foreign strategic shareholders.

"To grow effectively will require raising capital to increase the scale of operations," Hung said.

Vietinbank's total assets at the end of 2011 were worth 460 trillion VND (21.9 billion USD), and the bank also planned to increase this figure to 550 trillion VND (27 billion USD) this year and 50 billion USD by 2015.

The bank has set a credit growth target in 2012 of only 17 percent, down from 23 percent in 2011, Hung said, and it has been in the process of restructuring its investment portfolios in key State projects, government bonds and construction bonds./.